Missouri Chamber urges governor to sign legislation to keep auto sales in Missouri

 

 

Following the Missouri House’s final approval this week of Senate Bill 182, Missouri Chamber President Dan Mehan sent a letter to Gov. Jay Nixon urging his signature of the legislation that would eliminate the competitive disadvantage for Missouri automobile dealers caused by a Supreme Court ruling last year.

The Missouri Supreme Court ruled that local sales taxes cannot be levied when vehicle purchases are made by Missouri residents in another state. That decision provides Missouri residents an incentive to purchase vehicles across Missouri borders to avoid paying local sales taxes.

Illinois dealers have advertised the potential tax savings if Missouri consumers cross the Mississippi River and buy their vehicles out-of-state.

“Several hundred dollars will definitely change a buying decision,” said Dan Sinclair, whose family owns vehicle dealerships in St. Louis.

Legislation was passed in the 2012 Legislative Session to reverse the court ruling. Gov. Nixon vetoed that legislation. In his veto statement, Gov. Nixon said he objected a clause in the legislation that made the tax retroactive to when the state Supreme Court struck down the tax.

Lawmakers took another run at a legislative fix this session in the form of Senate Bill 182, sponsored by Sen. Mike Kehoe. The Missouri Senate unanimously passed SB 182. The Missouri House passed the measure on a 123-32 vote.
Specifically, the bill would prohibit counties and municipalities from imposing a local special use tax on motorized vehicle purchased out of state and brought back to the jurisdiction for licensing. Instead counties and cities would be allowed to charge the local sales tax rate on all motorized vehicles that are licensed in that jurisdiction regardless where the vehicle was purchased. The jurisdiction would have the option of eliminating the local tax through an election.

“The legislation restores Missouri’s automobile tax policy to what was originally intended and has been in practice for decades,” said Mehan in his letter to the governor. “Thousands of Missourians are currently taking their money across Missouri state lines to purchase vehicles in order to avoid paying local sales tax. This number will continue to grow as more residents become aware of the opportunity to avoid taxes.”

To view the Missouri Chamber letter to Gov. Jay Nixon, click here.

For more information on tax issues, contact Tracy King at tking@mochamber.com, or by phone at 573-634-3511.

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